Good Quote to Cash is Good CRM

Given the choice of working on your company’s Order Management Improvement project or the launch of a suite of Web 2.0 technologies to support product development a quick read of CRM trade publications today would clearly indicate Web 2.0 is the “now” place to be. In fact, many companies don’t feel order and billing management are within the domain of CRM at all. Unfortunately for companies with less than stellar performance in these areas, customers might disagree with you.

If CRM is about knowing your customer and building trusted relationships, then for most customers, the actual buying and paying is not just the most often executed CRM transaction – it is the basis for which all other components of the relationship grow. A quick stroll through the blogosphere reveals scores of public domain conversations about major companies such as the following:

…a correct bill seems to be the exception rather than the rule. Your odds for a proper bill from Big Company X improve if you've had the same hardware and software for a while along with a comprehensive services agreement, but quickly go down hill if you change hardware or software or have service performed outside the services agreement. If you've never had an incorrect invoice from Big Company X, you've either never done business with them for more than one transaction, or aren't looking closely at your invoices. Or have never called for support that was supposed to be free.

What are you to do? You call Big Company X. Sometimes, you get a helpful person who straightens things out right away. More often, you get a surly person bent on making you pay your incorrect invoice. In the latter case, you then call your Big Company X representative, who apologizes all over themselves and promises to take care of things. You feel good about the situation -- until next month's bill arrives with the same unpaid (and unearned) charges upon it.

If Big Company X cannot get its own house in order, how are they supposed to do the same for the rest of us? A business computer company that cannot perform the most basic of all business functions on its computers? Ridiculous.1

In short, a knowledgeable, caring, and invested customer sums up the transactional interaction with their vendor as simply “ridiculous.” All things being equal, if given a choice, where do you think this customer will go to for their next purchase? Bluntly, somewhere else.

Quote to cash is both the economic engine of any company and the basis for the relationship that you have with your customers. A supreme focus on the quality of your customer relationships, with the support of Web 2.0 tools, can tell you this or you can ask some simple questions which may indicate a need for your company to address root cause issues before you become the favorite target of your customers rants.

· Can a customer get a quote from you quickly and easily?

· Can a customer easily place an order from the quote?

· Is the order placed from a quote accurate and easy for the customer to execute?

· Can you generate an accurate bill on time?

· Do you regularly handle a large volume of disputes that result in customer credits?

· If a customer disputes the bill can you have a straightforward conversation with needed supporting information such as a contract, pricing, installed products, order history?

· Is it easy to reconcile a contract / order / price sheet with an invoice?

· Do your quotes, orders, contracts and invoices look the same? (This sounds simple but if your documents don’t look the same you will confuse customers)

· Do your long time customers carry extra clerical staff to maintain their business relationship with you?

· Do you accurately inform customers the status of their orders at regular intervals? (Order Acknowledgement, Order Confirmation, Shipping Notification, etc.)

If you can’t answer the above questions definitively or these evoke negative responses, your organization most likely needs to focus on basic blocking and tackling in quote to cash. The work is often difficult and not glamorous but your customers will thank you for it – with their continued business.

Fixing Quote to Cash problems:

* Define the Process End to End: Fixing the problem begins and ends with good understanding of current and desired process and awareness of points of failure. Most organizations separate the quoting, ordering and invoicing functions in different departments that each sub-optimize their own processes. Improvement initiatives should focus across these departments to avoid finger pointing and truly fix issues. If your organization lacks the ability to apply process management disciplines to Quote to Cash – get help.
* Automate and Validate the links in the Chain: Companies that execute Quote to Cash well link and validate all data in the chain. Looking at a simplistic flow such as Price List > Quote > Order > Invoice one must make sure that data and business rules come from the same or reconciled sources. If they don’t you will, at best, generate errors and incur high cost manual checking and corrections downstream in the process. At worst you will get a complaint call from the customer about an incorrect order or invoice.
* Go Upstream: Quote to Cash excellence requires early quality in the process. Pricing failures in quoting invariably result in customer credits and bad interactions with customers. To put it bluntly, you rarely solve billing problems in the billing department.
* Communicate Status to Your Customers: Best in class companies inform their customers throughout the quote to cash cycle. If you aren’t providing your customers order acknowledgements, confirmations, shipping notifications and regular order and payment status in either push or pull formats you are generating inquiries that customers don’t feel they should have to make and cost you money. Providing this information in an accurate fashion is a point of entry to eCommerce, not a leading capability.
* Measure, Measure, Measure: Quote to cash processes generate a tremendous volume of reported data in the typical company. Usually these measures are financial and volume related. Leading companies apply more systematic measurement and improvement programs around cost, quality and time related metrics. Cycle time metrics for orders and invoice can point their way to process improvements that get product to customers faster and result in faster payment and lower DSO. “Perfect order” and “perfect invoice” improvement projects can reduce customer complaints and dramatically lower processing costs.
* Involve Your Customers: The one thing that Web 2.0 has taught us is that your customers are going to have a publicly available opinion about you regardless of whether you want one or not and they will have the tools and ability to syndicate their opinion of you across the internet. Actively involving customers in improvement projects lets them know you care about their business and are listening to them.

Conclusion:

Continuous improvement programs in Quote to Cash can yield direct cost savings for existing business, avoid significant headcount additions in growing business, and reduce overall customer churn and improve loyalty. Improvements are often measurable in real dollars, which for most businesses, and their customers and shareholders, are exactly the type of results that more glamorous CRM efforts continue to lack.

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